Buying your first multifamily? Model the deal first.
Most first-time buyers walk into a property and try to imagine themselves living there. The right approach is the opposite — walk into the numbers first. Run the proforma. Stress the assumptions. Decide whether to fall for the property only after the math says it's worth falling for.
Not just a different kind of house. A different financial instrument.
Same down payment. Same monthly payment. Same neighborhood. A 2-to-4-unit property does something a single-family home structurally cannot.
Tenants pay your mortgage.
On a typical San Diego fourplex, the rent from the three units you don't live in often covers most of the mortgage, taxes, insurance, and reserves. Your effective housing cost ends up below renting the same unit.
Equity builds 4× faster.
A single-family buyer pays down their loan with one source: their own income. A multifamily buyer has three or four sources paying down the loan. Same down payment. Substantially more equity built over five years.
Cash flow, not a money pit.
A single-family home costs you money every month — mortgage, taxes, insurance, repairs, no offsetting income. A well-priced multifamily produces cash flow once stabilized. That difference compounds for decades.
You exit on NOI — not comps.
A house sells on what other houses nearby sold for. A multifamily property sells on its NOI capitalized at the local cap rate. The income you build directly drives what you can sell for — independent of your neighbors.
Live in one unit.Rent the rest. Buy with owner-occupied financing.
A 2-to-4-unit property bought as your primary residence qualifies for the same low-down-payment loans a single-family buyer gets. The same fourplex an investor would put $400K down on, an owner-occupant might enter for under $90K.
The high-friction path.
Non-owner-occupied multifamily loans require institutional-investor terms. The bar is high; the entry cost is higher.
The paththat actually opens.
Live in one unit for ~12 months. FHA at 3.5% down or conventional at 5% down on the same property. Tenants help you qualify, then they help you pay.
Owner-occupied loan products
FHA on 2–4 units has historically gone as low as 3.5% down. Conventional often starts at 5%.
Rents help you qualify
Most owner-occupied lenders count a portion of projected rents toward your debt-to-income.
Year 1 → an income asset
After your owner-occupancy period (12 mo for FHA), rent your unit out and repeat.
Tax treatment SFH doesn't get
Depreciation. Operating expenses deductible against rental income. Single-family ownership has none of this.
What most agents won't dofor a first-time buyer — that I will.
Buying your first multifamily is a different conversation than buying your first home. The agent on the other side of the table should be running different math.
A real proforma — not a vague "should cash flow."
Most agents tell you a property "should cash flow" and call that analysis. I run the full proforma — gross rent, vacancy, operating expenses, NOI, debt service, and the four metrics — on every property worth considering. You see the math before you write the offer.
Sensitivity, before you sign anything.
Knowing the answer at one set of assumptions isn't underwriting. I model what happens at higher vacancy, what happens at a half-point rate shift, what happens if a unit takes 60 days to turn. The deal we move forward with should still pencil under realistic downside — not just under perfect conditions.
A model you can use after close.
After the closing table, the proforma becomes your tracking baseline — Year 1 actuals vs. Year 1 model. Where you're outperforming, where you're underperforming, when to refinance, when to consider the next one. You don't just close. You learn how to operate.
The proforma — line by line,the way real estate finance defines it.
Most agents will tell you a property "should cash flow." That isn't analysis. The standard income-property proforma works through the same line items in the same order. Watch it build as you scroll →
Gross scheduled rent
Total rent the property would produce at 100% occupancy and current market rents. Built up unit-by-unit using the actual rent roll for occupied units and verified rent comps for any units below market. If the seller's listing claims rents that don't match the rent roll, we catch that here.
Less vacancy → EGI
Even fully-leased properties model 5–10% vacancy. We lose units to turnover, late rent, the occasional bad tenant. Pulling realistic vacancy out gives us effective gross income — what the property is actually likely to collect.
Less operating expenses → NOI
Property taxes, insurance, utilities the owner pays, management (real or imputed at 7–10%), maintenance, reserves, common-area items. Standard OpEx ratio runs 35–45% of EGI. NOI is the single most important number on the page — it's what cap rates are computed against.
Less debt service → BTCF
Annual P&I payments on your mortgage, based on your specific loan amount, rate, and amortization. NOI minus debt service equals before-tax cash flow — what shows up in your account each year. (In real estate finance: the "equity dividend.")
Compute the four metrics
From those line items, the proforma generates the metrics lenders, appraisers, and investors all use: cap rate (unleveraged yield), cash-on-cash (yield on your equity), DSCR (lender minimum 1.20), and break-even occupancy (the rate at which the property covers its own bills).
Stress-test the variables
What if vacancy is 10%? What if rates rise half a point at refinance? What if a unit takes 60 days to turn? The deal is the deal that survives the downside case — not the one that only works at perfect assumptions. Sensitivity is the difference between an underwrite and a sales pitch.
A real proforma — line by line.
Below is exactly the analysis described above, applied to a typical North Park 4-unit. The numbers are illustrative — on your actual deal, every input would be your specific rents, your specific financing, your specific market.
4-Unit Multifamilybuilt 1978 · 5,800 sf lot
"Placeholder testimonial — Giovanni walked me through every number on the proforma before I made my first offer. I understood exactly what I was buying."
From "I'm thinking about it" to "I own this."
Six floors. Each one structural. The tower we build together — strategy at the foundation, ownership at the top.
Strategy session & lender pre-approval.
Your goals, timeline, cash, credit. Then a multifamily-savvy lender to map your loan products and pre-approval — what you actually qualify for, owner-occupied vs. investor financing, FHA vs. conventional. Most people skip this step and look at properties they can't actually buy. We don't.
Targeted San Diego search.
Duplexes, triplexes, fourplexes that match your purchasing power and the submarkets that fit your strategy. On-market and off-market. Including small properties with unrealized development upside under SB 9 / ADU law — value most agents miss.
Full proforma on every property worth a second look.
The full underwrite — gross rent through NOI through cash flow through cap rate, cash-on-cash, DSCR, and break-even. Plus a sensitivity table on vacancy, rent growth, and rate shocks. Delivered as a clean one-page summary you can actually read.
Offer strategy & negotiation.
Price, contingencies, due diligence period, financing terms, leaseback if you need it. Coordination with the listing agent, escrow, your lender, the inspector, the appraiser. The proforma we built becomes the basis for what we'll pay — not what the seller is asking.
Due diligence — verify everything in the proforma.
Rent roll audit (tenant by tenant). Lease review (rent, term, deposits, special clauses). Trailing 12 months of seller financials. Property inspection. Permits and code compliance. Every assumption gets verified — or updated. We make decisions on updated numbers, not listing numbers.
Close — and the model becomes your operating playbook.
After close, the proforma becomes your tracking baseline. Year 1 actuals vs. Year 1 model. Where you're outperforming, where you're underperforming, when to refinance, when to start thinking about the next one. You're not a homeowner who happens to have tenants. You're an investor with a plan.
A licensed advisorwho's actually done this work.
DRE Licensed Multifamily Investment & Development Advisor (#02282434), San Diego. UC San Diego B.S. in Real Estate & Development — a project-based program tied to actual properties, actual investors, actual financial models.
Before any of that: three generations of family ownership in Tijuana, where I spent years on construction sites, working land transactions, and helping finance, build, and lease somewhere between thirty and sixty units across our family's projects before I turned 21.
I'm not learning multifamily on your transaction. The proforma I'll run on your deal is the framework I think in.
What first-time buyers usually ask before we get started.
Q.01Do I need a big down payment?+
Q.02Will I have to be a landlord and deal with tenants?+
Q.03What if rents drop or I have a bad tenant?+
Q.04How is working with you different from a typical agent?+
Q.05What does it cost to work with you?+
Ready to see the numbers?
Send me a property you're considering — or just your goals — and I'll come back with a real proforma. No pressure. No obligation.
One call.Then a model.
No fees until you transact. No high-pressure pitch. The numbers will tell us if there's a deal here — and the call will tell us if we're a fit.